Ms Moyagh Murdock:

I will take the first three parts of the question and then I will defer to my colleague, Ms Thornton, on the model itself. Regarding the impact of the lower-income group, we are examining other jurisdictions that have introduced an auto-enrolment scheme, in particular, New Zealand, and even our near neighbours in the UK, which has a threshold of £10,000. We have drawn from their experience. They had a kick-start in New Zealand. They had no threshold, but they added NZ$1,000 to the scheme. They found that was necessary to get the uptake from the cohort of lower-paid workers. The experience we hear from the UK is that if they had to do this scheme again, they would remove the £10,000 threshold and reduce it even further, because it does prove to be a barrier to entry to the scheme.

The Chair made the point about having to divert income to more pressing matters such as grocery shopping and the like, but for many lower-paid workers, when they get an opportunity to divert money into a pension scheme, it becomes part and parcel of the net income that they are coming out with. It is a very good practice. The early years when people are on lower incomes are important because of the effect of compound interest. We are drawing our experience on the best in class where it has proven to be a barrier to have such a high threshold of income.

The Chairman also stated that it impacts on part-time workers, many of whom may not ever reach the threshold of €20,000, and who are predominantly women in caring roles and working part time when they can fit it in around family demands. It is affecting a smaller cohort of the target audience, but it is negatively impacting the female cohort in particular. We believe that addressing it now at the outset of the new auto-enrolment scheme is the best time to do it. The experience from other jurisdictions is that once it becomes part of legislation, there is little appetite from governments and political parties to go back in again and change the rules of the scheme. We are advocating to get it right first time, to listen to the experience of other jurisdictions and to address the income threshold.

Many lower-paid workers are younger people who are aged under 23 and still living at home. This is a good saving scheme. It brings them into the practice of putting money aside for their long-term financial well-being. They can probably afford it more than we would estimate because they are probably living at home with their parents, and they do not have the demands of a family, mortgage and household bills. We would see it as an opportune time to start a pension scheme, and not something that we should delay until they are in their mid-20s or much older.

In response to the point about the "unproven model", from my own experience as the ex-chief executive of the Road Safety Authority, I know how complex it is to set up a fully functioning and competent body, drawing from resources that the financial services sector already finds difficult to secure. We are suffering from a skilled labour shortage in this sector. We are starting this structure from scratch, and I fear we will have to build quite a large organisation to deliver on what is set out in the Bill. Head 15 sets out almost 20 executive functions for the CPA. I will ask Ms Thornton to elaborate on the point.